New pipeline policy could solve Keystone XL problems

New pipeline policy could solve Keystone XL problems 06/08/14
by John Brian Shannon John Brian Shannon

Which are the most dangerous pipelines?

It’s an easy answer. Old pipelines.

Oil companies don’t advertise the first 15 years as the safest pipeline years. All bets are off after 30 years. And almost every pipeline spill in North America shows a pipeline well past 30 years of age.

One of the biggest problems contributing to leaks and ruptures is pretty simple: pipelines are getting older. More than half of the nation’s pipelines are at least 50 years old. — How Safe are America’s 2.5 Million Miles of Pipelines? published by propbulica.org

The average age of North America’s petroleum pipelines is getting older all the time (as there are few new pipelines are being built) so the existing pipeline network continues to age. But some pipelines built 30+years ago are so fragile from a maintenance perspective that they shouldn’t be allowed to transport toxic crude oil, dilbit, petroleum distillate, bunker fuel, or coal oil.

Forty-one per cent of U.S. oil pipe was built in the 1950s and 1960s; another 15 per cent of the country’s 281,000-kilometre network was built before then. In Alberta, 40 per cent of pipe was built before 1990. — Globe and Mail

How long does it take to ‘pay off’ a pipeline investment?

Depending upon the terrain a pipeline is traversing, pipelines can cost anywhere from thousands of dollars per mile up to millions of dollars per mile, especially when laying them through populated areas or under or above rivers and lakes. It can cost billions of dollars to build one pipeline.

Of course, if you want to move petroleum through a pipeline to your oil refinery, you are going to pay a significant dollar amount to transport that oil across the continent. Each oil refinery can refine up to one million barrels of oil per week. The oil refinery has only so much storage available to it on-site so it usually ships the refined product out ASAP via another pipeline system to a rail network, or direct to the customer via yet another pipeline.

U.S. petroleum pipeline map
U.S pipeline map. Toxic liquids show in red colour, while natural gas shows in blue. Image by propublica.org

After 15 years of operation, pipeline companies finally ‘break-even’ on their original investment

“Now we can finally make some money!”

Pipelines are quite costly to gain approval for from national and local regulators, to buy or lease the land, to design, build and operate. It also is the case that oil companies pay millions of dollars per year to the pipeline companies to move their liquids around. It is an annual business of billions, not millions.

We all need to make money and pass the ‘break-even’ point in our investments

We all want and need to make a return on investment (ROI) which is the reason we start businesses in the first place. But, just at the point that a pipeline has finally broken-even investment wise for its investor group, it is beginning to seep oil at the gaskets (called ‘weeping’) and also leak oil at the pump stations, and at areas where the pipeline has been disturbed by ground movement due to frost, ground settling, or earthquake movements. Some of this weeping can continue on for many years before anyone visits that remote area, which may not have been visited since the construction of the pipeline. Running toxic liquids across a continent safely, but economically, are mutually exclusive matters.

But without oil pipelines, our economy would grind to a halt within 90 days

Without pipelines, only coastal cities would be able to receive gasoline, diesel, kerosene, or other liquids used for transportation fuels, via international shipping lines. Other users of petroleum, such as chemical, plastics, and pharma companies would need to relocate to coastal areas to receive their petroleum ingredients.

It is a case of need vs. greed

  1. “We need the oil, keep it coming,” say consumers.
  2. “We need to keep our environment clean,” say a rapidly growing number of citizens/consumers.
  3. “We need to recoup our pipeline investment and make a profit in order to stay in business and we do it all for groups #1 and #2,” say the pipeline companies.

If ever there were a situation calling out for compromise, this has got to be it.

But the simple fact is, old pipelines weep plenty of oil and eventually burst, releasing tons of toxic liquids into the environment. New pipe does not burst or leak — unless it was to be hit by a derailed train, a transport truck, or an airplane crash — all of which are very unlikely events.

A mechanism for safe petroleum transport that works for all

Add a mile of new pipeline | Remove a mile of old pipeline

There are many pipeline systems that have been transporting petroleum for 30+ years in North America. These old pipes weep oil everyday. You might not see it, some of them are underground, or in wilderness areas where pipelines often traverse, or are just not accessible for viewing by the pubic or inspectors for that matter.

Some pipelines in North America are 45+ years old and they are big leakers — and just like purchasing carbon credits — one pipeline company could sell their RRR credits to another company that is ready to build a new pipeline.

It may seem odd for you to hear this solution from a renewable energy proponent; We should build more new pipelines!

What? Yes, but only if we completely remove 30+ year old pipelines on a mile-per-mile basis and remediate the soil and replant native species of plants along the historic route of the removed pipeline.

If pipeline company “A” wants to build a new pipeline, (such as Keystone II, for example) then government regulators should require that for every mile that they want to install new pipeline, the pipeline company is required to completely remove and remediate the soil and plant life, from whence an old pipeline has been removed.

This would help us to get rid of thousands of miles of old, leaking, and rusting pipelines that even the oil companies have forgotten about. They are environmental catastrophes just waiting to happen.

You can never completely empty a pipeline so they just sit there decade after decade weeping oil into the groundwater. Some old pipelines, although very leaky, are kept in place just in case of emergency so oil can be quickly diverted to the old pipeline for transport to a different junction in the system — and thereby still arrive at the oil refinery (and likely a day late and a few tens of barrels of oil short).

But that isn’t the best solution for the environment.

The best solution is easier approvals for newer and safer pipelines, contingent upon Retiring, Removing and Reclaiming (RRR) the land on the same total mileage of 30+ year old pipeline in the North American petroleum distribution network.

If Keystone II is 3500 miles of shiny new, high-tech, and state-ot-the-art pipeline, that’s great. It’s orders of magnitude less likely to leak, than 3500 miles of old pipeline.

All pipelines over 30 years old should be allowed to qualify for this removal/remediation programme. And the pipeline companies signing up for the Retire, Remove and Remediate (RRR) pipeline plan should receive tax incentives to assist in this regard. And, bonus, they can sell the land, once it is remediated.

Birth of a new industry

With the high prices of metals these days, oil and pipeline companies could find that passing the actual RRR work to another company could be the way to go. Even if the old pipe and pumps and pumphouses, etc, end up being sold for the scrap metal value, millions of tons of 30+ year old pipeline is sitting on the ground or just underground, waiting to be picked up and recycled.

Add in soil and plant remediation, and you have a whole new business model. A business where the workers could feel proud of the work they do!

“What do yo do for a living?”

Wouldn’t it be nice for an petroleum industry employee to be able to reply;

“I remove old, leaky pipelines, remediate the contaminated soil, replant the areas with native plants, and recycle millions of tons of old, leaky, pipeline metal.”

That has got to be the feelgood moment of the year, for any oil company employee.

Not your typical oil company employee job description

Yet, with some executive-level decisions and with a common-sense regulatory framework, RRR could finally solve the problem of the many thousands of miles of dormant but still weeping pipelines — and spawn a whole new business model — while helping to protect our North American ecosystems that wildlife depend on.

Royal Dutch Shell Report Spells Big Changes for Energy

by John Brian Shannon

Royal Dutch Shell has published a startling report in which it lays out it’s future view and it has detailed huge global implications for citizens, governments and the energy industry.

Shell’s New Lense Scenarios (policy paper) paints a picture of a new order among the different kinds of energy and how energy use will change between now and 2100.

Two different scenarios are discussed and named. The two, named ‘Mountains’ and ‘Oceans’ take different views of the many factors likely to affect the industry over the next 87 years,  but there is more consensus than disagreement between the two views.

The boom in natural gas figures prominently in both scenarios with natural gas dramatically ramping-up to become the number one kind of energy in the world by 2030.

“In 2030, natural gas becomes the largest global primary energy source, ending a 70-year reign for oil.” — NLS report

Due to enhanced Carbon Capture and Storage, clean combustion technology and the use of CO2 gas for industrial processes by 2100, Shell sees global emissions of carbon dioxide dropping by 2100, to nearly zero.

A quote from the report’s main authour Jeremy Bentham, speaks volumes about the anticipated level of demand for natural gas; “The underlying pent-up demand for gas is very strong…we see it being sucked up, every molecule.”

By 2060, the report has PV solar power moving into number one position to provide at least 38 percent of global energy supply — well up from today’s distant ranking of 13th place. See; Shell Sees Solar As The Biggest Energy Source After Exiting It in 2009.

Due to enhanced Carbon Capture and Storage, clean combustion technology and the use of CO2 gas for industrial processes by 2100, Shell sees “global emissions of carbon dioxide dropping to near zero by 2100”.

By 2100, energy from oil will account for only 10 percent of worldwide energy use and natural gas will account for just 7.5 percent of the global total, Shell said.

What might lie ahead 50 years from now… or even in 2100? We consider two possible scenarios of the future, taking a number of pressing global trends and issues and using them as “lenses” through which to view the world.

The scenarios provide a detailed analysis of current trends and their likely trajectory into the future. They dive into the implications for the pace of global economic development, the types of energy we use to power our lives and the growth in greenhouse gas emissions.

The scenarios also highlight areas of public policy likely to have the greatest influence on the development of cleaner fuels, improvements in energy efficiency and on moderating greenhouse gas emissions.

Mountains

The first scenario, labelled “mountains”, sees a strong role for government and the introduction of firm and far-reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources – making it the largest global energy source by the 2030s – and accelerate carbon capture and storage technology, supporting a cleaner energy system.

Oceans

The second scenario, which we call “oceans”, describes a more prosperous and volatile world. Energy demand surges, due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2060s solar becomes the world’s largest energy source. – Shell

Download New Lens Scenarios PDF (PDF, 9 MB) – opens in new window

After selling off it’s global solar holdings in 2009, except for those located in Japan, Shell, having taken a long, studious look into the future, has since embraced PV solar as never before and is presently buying back it’s own shares at a brisk pace.

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JOHN BRIAN SHANNON

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U.S. Fuel Subsidies Chart

Image courtesy of Cleantechnica.com
Image courtesy of Cleantechnica.com
JOHN BRIAN SHANNON

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The Big Energy Story of 2012

by John Brian Shannon

The world energy industry is suddenly transforming into something very different from the industry we have grown accustomed to over the past decades. In those previous decades, it was pump and burn more oil, mine and burn more coal and build more coal-fired burners to produce electricity. More, more and more smokethat is!

Anti-nuclear protesters were a constant feature in the press anywhere a reactor was considered, built or commissioned into use. Urban residents held irregular anti-smog protests outside of City Hall in large cities like LA and Tokyo.

Small-scale and large wars, were fought over control of the world’s oil and gas fields — sometimes affecting the very economic health of those nations.

Welcome to 2013. The world is still reeling from President Barack Obama’s decision to wean America completely off of foreign oil, he also ordered oil and gas production to be dramatically ramped up in the U.S.A. – and he decided to make his country a net oil exporter of oil and gas. Not just any-old net exporter mind you, but the world’s number one exporter of both oil and gas by 2017! That’s in four years.

Heady stuff for a normally ambivalent world.

Remember back in February of 2006, when then-President George W. Bush famously stated in his State of the Union speech that “America is addicted to oil.” That of course, is true. The U.S.A. and the other industrialized nations wouldn’t survive without oil as the entire Western economy is based on petroleum and the products made from it. From transportation and energy fuels, to plastics, medicines, agricultural fertilizers, residential and commercial buildings – virtually everything we live in, drive, wear, buy or use, is a product or by-product of petroleum.

Both Presidents — Obama and Bush, foresaw the importance of lowering overall energy use to improve the health and quality of life for American citizens, to lower international tensions by sourcing oil and gas domestically and to invest in clean technology to improve conservation and efficiency.

It turns out that conservation, green energy and domestic energy extraction is not a Democrat or Republican thing — it’s a leadership thing. And all over the world, it is catching on. Welcome to 2013, indeed!

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Harper Should Lobby for Free Trade with China | MY COMMENT

Harper Should Lobby for Free Trade with China — The Huffington Post – Canada
by Yuen Pau Woo, President and CEO, Asia Pacific Foundation of Canada   January 13, 2012

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MY COMMENT — Free Trade agreements are becoming more common world-wide­. It is up to the countries involved to set their own particular free trade agreement rules and conditions­. Every bi-lateral agreement is different.

But it is a trade matter — it is not a venue to browbeat the other country over their human-righ­ts situation etc. it is simple matter of you sell us X and we will pay Y, on as many products or services as both sides decide to include in the accord.

One thing that we like about this scenario is that by engaging in trade with Western nations developing nations learn our ways. This helps them to progress in real time in all matters, including among other things, best practices for the business community, human rights, environmen­tal legislatio­n and the reasons for those standards.

Where there is better communicat­ion — better relationsh­ips result.

A FTA with China, Japan, India and other countries will facilitate better relationsh­ips with those countries AND improve Canada’s economy.

Will an FTA solve every problem? No, obviously not. There will never be one big agreement that will address every identified negative policy or procedure in a developing country. An FTA will however, play an integral part of that process going forward.